TaxTMI 
TaxTMI 
2022 (3) TMI 31
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....nal Travel Services vs Commissioner of income Tax, Delhi, VIIII- Civil Appeal No. 2068 of 2071 of 2012." The assessee in its C.O. has raised the following grounds:- "1. On the facts and in the circumstances of the case and in law, appeal order of CIT(A) is prayed to be upheld as there are two decision of Honorable Apex Court in our favour and judgment on which the AO relied on is a prima facie views of the judges of the honourable SC in which appeal has been placed before the honourable chief justice of India in order to constitute bench of three Ld. Judges for final judgment. 2.On facts and in the circumstances of the case and in law, if addition in respect of deemed dividend u/s 2(22)(e) of the IT Act is upheld, then it should be restricted to the accumulated profit of M/s Joy International Ltd. (JIL) as on 31-03-2012 to the extent of Rs.,1,92,31,440/- as current year profit cannot be considered for the purpose of section 2(22)(e) of the Act " 2. Brief facts of the case are that assessee-company is engaged in the business of manufacturing of Guar Gum products. The assessee filed its return of income for assessment year (AY) 2013-14 on 28.09.2013 declaring income of Rs. 12.8....
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....nuous transaction between both the companies. Further, there is no transaction which reveals direct benefit to the shareholders and the assessee-company. Therefore, the transaction is not covered under the ambit of section 2(22)(e) of the Act. 4. The reply filed by assessee was not accepted by the Assessing Officer. The Assessing Officer had held that assessee accepted loan from JIIPL of Rs. 12 crores and Shri Devji N Palani holds 21.74% shares in M/s DNP Foods Ltd. (assessee) and 33.33% shares in JIIPL. Therefore loan transaction falls within the preview of section 2(22)(e) of the Act. 5. The assessing officer further recorded that during the assessment, the assessee pointed out from the balance of reserve & surplus of JIIPL stood at Rs. 5,74,45,129/- and the disallowance of deem dividend should be restricted to that extent. The Assessing Officer further recorded on verification of contention of assessee the balance of reserve & surplus in the balance-sheet of JIIPL was of Rs. 5,74,45,129/- and accordingly the disallowance of deem dividend was restricted to that extent only. The Assessing Officer again recorded that the Authorized Representative of assessee has given his no obje....
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.... 5.74 crores, the assessee explained that the Assessing Officer hurriedly passed the assessment order without allowing sufficient time and draft order was served on 23.12.2016 and consent of their Chartered Accountant (CA) was obtained on 23.12.2016 and completed assessment on 26.12.2016. The assessee further explained that there was no consent from assessee-company and that their CA missed some important case law of Hon'ble jurisdictional High Court as well as ITAT. The assessee specifically contended that agreement on legal issue is not relevant and relied on the decision of Hon'ble Madras High Court in the case of Balasubramaniam, R.T. Vs. ITO (1994) 50 ITD 513 (Madras). The assessee also filed copy of income tax return, audit report, list of shareholders, ledger account, and copy of draft assessment final assessment in case of JIIPL. 9. The Ld. CIT(A) after considering the submission of assessee observed that there is no dispute that Shri Devji N Palani holding 33.33% share in JIPPL and also holding 21.74% in assessee-company. The first condition of deem dividend was existing in this case. But for second condition that recipient should be shareholder of company does no....
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....bad High Court in the case of Gauri Sahai Ghisaram vs. CIT (1979) 120 ITR 338 (All) wherein it was held that the assessee cannot be denied to file appeal in case of agreed addition. Aggrieved by the deleting the addition under section 2(22)(e), Revenue has filed present appeal before this Tribunal. 12. We have heard the submissions of Ld. Commissioner of Income-Tax-Departmental Representative (CIT-DR) of the Revenue and Ld. Authorized Representative (AR) of assessee. With their active assistance, we have also gone through the orders of authorities below. We have also deliberated on the various case laws relied by the assessee or by the lower authorities in their order. 13. Perusal of record we find that there is delay of 162 days in filing the present appeal. We find that vide order dated 25.05.2021, the delay was condoned as the Ld. AR of the assessee raised no objection, in case the delay in filing the appeal is condoned. Thus, vide order sheet dated 25.05.2021, the delay in filing the appeal was condoned. Thus, the submission of Ld. CIT-DR for the Revenue and AR for the assessee was heard on merit. The Ld. CIT-DR for the Revenue submits that it was apparent from the column-24(....
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....onstitute an appropriate Bench of three learned judges to have a relook at question "being a person who is a beneficial owner of shares" and that there is no finding which is said to be against the assessee in the present reference. As such, deemed dividend is decided in favour of assessee by various decisions of Hon'ble Apex court, Hon'ble High Courts and various Tribunals. The issue was decided by Ld. CIT(A) on the basis of various binding decisions. The transaction between assessee and JIIPL are in the nature of Inter Corporate Deposits which is in the form of group companies transactions in current account transaction to the interest is also paid considering the credit and debit balance-sheet. There was a business consideration as the assessee made purchases of Rs. 127.47 crores from JIIPL. To support his submission, Ld. AR of the assessee also relied upon the following decisions:- * CIT vs Shutz Dishman Bio Tech Pvt. Ltd. (2016) 70(I) ITCL 2017 * ITO vs Seasons Hotels Pvt. Ltd., [ITA No.2502/AHD/2010] * Miric Commercial Pvt. Ltd., vs. PCIT [ITA No.1059/KOL/2016] * Exotica Housing & Infrastructure Co. Ltd., * ACIT vs. Shri Gurdeep Singh [ITANo.170/CHD/2018] 1....
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....t the admission is not binding on the assessee in view of the decision of Hon'ble Allahabad High Court in the case of Gauri Sahai Ghisaram (supra) and in the case of Rani Anand Kunwir Vs. CIT 8 ITR 126 (Oudh). In our view it is settled law that admission on the mistake of fact or mistake of law is not binding on the assessee. Moreover, no tax can be collected without the authority of law as mandated by Article-265 of the Constitution. Therefore, we affirm the view of Ld. CIT(A) on this aspect. 20. So far as deleting the addition under section 2(22)(e) is concerned, the Ld. CIT(A) observed that it is not in dispute that Shri Devji N Palani is holding 33.33% of share in JIIPL and also shareholding of 21.74% in assessee-company. Thus, the first condition for deemed dividend is completed in this case. So far as second condition that recipient should be shareholder of the company does not exist as assessee-company is not shareholder of JIIPL. The payment by JIIPL to the assessee-company is treated as deemed dividend only on the basis that there is some common shareholder holding substantial interest in both the companies. The Assessing Officer not only treated the transaction of re....